Situation in which quantity demanded is greater than quantity supplied:
a. supply shock
b. shortage
c. excess supply
d. disequilibrium
e. search costs
Ans: b. shortage
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Are returns to a single input and returns to scale one and the same? Explain.
What will be an ideal response?
When an economy is operating on its production possibilities curve, more production of one good means less production of another because:
a. resources are limited. b. resources are not perfectly adaptable to alternative uses. c. wants are limited. d. wants are unlimited. e. some resources are not employed.
In order to predict changes in aggregate demand, it must be possible to forecast
A. changes in the demand for investment goods. B. changes in the demand for consumer goods. C. changes in the demand for money. D. All of the choices are correct.
An example of the command-and-control approach to environmental policy is:
A. placing a tax on freon to reduce its use and the corresponding CFC emissions (which contribute to the ozone hole). B. requiring car producers to install new air conditioners that do not use freon. C. allowing coal producers to buy and sell permits to allow CFC emissions. D. allowing individuals to sue freon producers if CFC emissions exceed a government-set standard.